Keir Starmer drops £28bn green ‘albatross’ in latest watering-down of policy

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Sir Keir Starmer has long argued his party would give businesses the certainty they need to invest in the UK. But the Labour leader’s volte-face on his green investment plan showed how hard that is, even in opposition.

On Thursday, Starmer slashed Labour’s signature promise to spend £28bn annually on green initiatives to a mere £4.7bn a year, ending months of uncertainty over the party’s commitment to the plan.

What seemed like prudent levels of borrowing when the policy was announced in 2021 was no longer the case, he told reporters. Asked if he deserve the nickname “Mr Flip-Flop”, Starmer said that was “ridiculous”.

The essence of Starmer’s argument was that circumstances had changed, with public finances and the economy both in a worse state than two years ago. Official interest rates had spiked from virtually zero to 5.25 per cent.

“You need to adjust your position when conditions change. That’s plain common sense,” he said.

The original “green prosperity plan” was announced by shadow chancellor Rachel Reeves to thousands of delighted party members at Labour’s 2021 conference. Mirroring Joe Biden’s Inflation Reduction Act in scale and ambition, the plan was by far Labour’s biggest single policy pledge.

Its dismantling, by contrast, came at a low-key briefing by Starmer and Reeves to journalists, behind closed doors in a parliamentary room and away from cameras.

The substance and style of Labour’s biggest U-turn for years demonstrated the ascendancy of cautious Blairites inside Britain’s main opposition party, as the green prosperity plan joined a long list of radical promises watered down by Starmer.

The briefing at 3pm on Thursday afternoon was the final act in what had become an increasingly painful process of gradually backing away from Reeves’s initial pledge.

For three months Starmer and…